16 Jan: Markets steady on Friday. ECB, Brexit, US CPI, China GDP, Davos & Trump inauguration in focus this week.

By | January 16, 2017

 

 The dollar remained relatively steady on Friday following the release of the US Retail Sales, which came in at 0.6% in December, a solid reading but missing expectation of 0.7%. Ex-auto sales rose 0.2%, also missed expectation of 0.5%. Headline PPI rose 0.3% mm, 1.6% yy in December, up from November’s 1.3% yy meeting expectation. Earlier in the day, softer-than-expected trade data from China added to signs that investors may be having second thoughts about the post-U.S. election Trump trade although stocks ended up having a steady session. Cable remains under pressure on Brexit concerns, and has opened sharply lower on Monday (1.1983 low) after a weekend report that the UK will opt for a hard “Brexit”.

Although today is a US holiday it is going to be a busy week, with political and economic leaders gathering in Davos for the World Economic Forum, which will continue through the week, and where Janet Yellen is scheduled to speak twice (Wed/Fri). Elsewhere there is plenty going on, with highlights being UK PM, May, due to make a major statement on Brexit (Tue), the ECB Meeting (Thur), inflation data due from the UK (Tue), Germany, EU and US (Wed) and the China GDP/Retail Sales (Thur). Other points of note will be the ZEW Survey (Tue), Australian Unemployment (Thur) and the Philadelphia Fed Mfg Survey (Thur). Have a good week

CURRENCIES
EURUSD: 1.0641
Res  1.0685  1.0700  1.0750
Sup  1.0600  1.0570  1.0530
USDJPY: 114.52
Res  115.10  115.55  115.95
Sup  114.00  113.70  113.25
GBPUSD: 1.2000
Res  1.2100  1.2150  1.2200
Sup  1.1950  1.1900  1.18.21
USDCHF: 1.0087
Res  1.0120  1.0150  1.0180
Sup  1.0075  1.0055  1.0040
AUDUSD: 0.7502
Res  9111.4740  9507.2270  9875.3690
Sup  8697.3140  8329.1720  7915.0120
NZDUSD: 0.7127
Res  0.7145  0.7170  0.7200
Sup  0.7100  0.7075  0.7045
INDICES / COMMODITIES
S+P: 2271
Res  2276  2280  2290
Sup  2264  2256  2248
DJ30.fs: 19825
Res  19875  19920  19980
Sup  19770  19690  19510
SPI200.fs: 5704
Res  5720  5740  5760
Sup  5680  5665  5650
GOLD: 1198
Res  1206  1220  1234
Sup  1188  1178  1170
XAGUSD: 16.80
Res  17.00  17.15  17.30
Sup  16.55  16.40  16.25
OIL (WTI): 52.48
Res  53.50  54.35  55.20
Sup  52.00  51.45  50.70

 

Indices/commodities
S&P Futures 2271
The S+P traded a tight 2262/73 range on Friday, leaving the outlook unchanged, and with it being a US holiday it will be very quiet. Further out, the dailies look a little heavy while the weeklies remain positive, so a cautious stance is best as we head towards Donald Trump’s inauguration on Jan 20. Buying dips would seem to be the longer-term theme although I cannot bring myself to do so at these levels and the Trump factor could easily see stocks turn ugly – very quickly – if he ramps up the prospect of a trade war with China.
24 Hour: Neutral Medium Term: Look to buy dips – with tight SL
Resistance Support
2300 Minor 2262 Friday Low
2290 Minor 2248 12 Jan low
2280 Minor 2240 Minor
2277 All-time high/14 Dec high/6 Jan high 2230 Minor
2273 Friday high 2225 30 Dec low
DJ30.fs 19825
Ditto S+P.
24 Hour: Neutral Medium Term: Look to buy dips – with tight SL
Resistance Support
20000 Minor 19771 Friday Low
19964 All-time high/14 Dec high 19692 12 Jan low
19924/20 6 Jan high/9 Jan high 19660 30 Dec low
19903 11 Jan high 19600 Minor
19875 12 Jan high /Friday high 19500 10 Jan low
SPI200.fs 5704
The SPI broke below the rising trend support at 5710 on Friday, heading quickly to 5666 before a recovery to sit back at earlier levels just under the trend line. The short-term momentum indicators are now pretty much neutral but the dailies still look a bit toppish, so we could see a retest of the Friday low at 5666, below which there is not a lot to hold the SPI up until 5615.On the topside sellers will be seen at Friday’s high (5740) and again at 5760, a break of which would then allow a return to the 5790 area although this is beginning to look less likely. If wrong and we do head above 5790 at any stage, there really is not too much resistance ahead of the 29 May 2015 high at 5814, and beyond that, the 5 May 2015 high of 5889. Although the weeklies still point higher, the near-term risk appears to be to the downside and selling into strength, with a SL above 5760, or possibly above 5790 is now preferred.
24 Hour:  Neutral Medium Term: Mildly bearish – Prefer to sell rallies
Resistance Support
5814 29 May 2015 high 5680 Minor
5789 9 Jan high 5666 Friday low
5761 12 Jan high 5650 Minor
5740 Friday high 5615 30 Dec low
5720 100 HMA/200 HMA 5605 23.6% of 5029/5789
GOLD 1198
Gold traded within a range of 1188/1200 on Friday leaving the outlook unchanged. The short-term momentum indicators are flat, possibly slightly negative, and a similar session today would not surprise. With the dailies still looking positive, looking to buy at around 1170/80 may be a longer-term plan, with a SL placed tight under 1160. If we do head higher, above the 12 Jan high at 1207 would then target 1215/20.
24 Hour: Neutral Medium Term: Prefer to buy dips.
Resistance Support
1235 Minor 1188 Friday Low
1219 38.2% of 1375/1122 1186 (23.6% of 1122/1207)
1215 23 Nov high 1175 (38.2% of 1122/1207)
1207 12 Jan high 1165 (50% pivot of 1122/1207)
1201 100 WMA /Friday high 1155 (61.8% of 1122/1207)
XAGUSD 16.80
Silver traded within a range of 16.60/84 on Friday leaving the outlook unchanged. Further choppy trade looks likely today, but the daily charts still look mildly positive so if we do break 17.00 we could then head to 17.30. I would be surprised to see it head above 17.00 today given that the short-term momentum indicators are now looking a little heavy. The downside should again see support at the 100 WMA (Weekly moving average) at 16.70, which could still act as a pivot, and then at the 10 Jan low at 16.53, which were the lows for both 10/11 Jan.
24 Hour: Neutral Medium Term:  Prefer to buy dips
Resistance Support
18.00 Minor 16.70 100 WMA
17.90 Minor 16.53 10 Jan low/11 Jan low
17.30 (50% of 18.98/15.63) 16.41 9 Jan low
17.21 7 Dec high 16.25 6 Jan low/200 HMA
16.98 12 Jan high 15.83 30 Dec low
OIL (WTI) 52.48
 

WTI finished the week by trading a choppy 52.25/53.15 range. Technically the outlook remains the same. Look for a choppy range of 50.70/54.00 to cover it over the next few days, with a topside break of 54.00 likely to target the 55.21 January high. On the downside, immediate minor support lies at 52.00 and then again at the H/S neckline at 50.70, which should be strong. Back under 50.00 could then open the way to 49.00 and possibly towards the 200 DMA at 47.00. As before, keep SL on long positions either on a break below 50.70 or at around 49.20. As for today, 52.00/53.50 may cover it. Prefer to buy dips.

24 Hour: Mildly bullish Medium Term: Cautiously long – Tight SL sub 50.00
Resistance Support
55.21 3 Jan high 52.25 Friday Low
54.29 6 Jan high 52.09 12 Jan low
53.80 9 Jan high 51.00 Minor
53.47 12 Jan high 50.70 Rising trend support/ Reverse Head/Shoulders Neckline
53.15 Friday high 50.00 Psychological

EURUSD: 1.0641
EurUsd was choppy on Friday following the release of the US Retail Sales and finished towards the upper end of the range, keeping the dollar under some pressure. Having finished the week just below the 55 DMA, the short-term momentum indicators are mixed and fairly neutral. The daily charts still point higher though, so another test of last week’s 1.0684 high would not really surprise, above which could see a run towards 1.0700. A break of this levels then sees little to stop the Euro heading to 1.0815, so I think stops on shorts should be left tight above 1.0700. In the longer term, as before, I still prefer to sell into strength given that the US data generally remains firm and the Fed look likely to raise rates again while the ECB are going to remain on hold for the foreseeable future and will continue with their QE programme through 2017. Given that it is a US holiday today, look for something like 1.0600/1.0700 to cover it again but cautiously keeping note of a possible upside break of 1.0700.
24 Hour: Neutral Medium Term: Mildly bullish – but look to sell into strength.
Resistance Support
1.0815 (50% pivot of 1.1299/1.0340) 1.0595 Friday Low
1.0750 Minor 1.0570 12 Jan low
1.0702 (38.2% of 1.1299/1.0340) 1.0530 200 HMA
1.0684 12 Jan high 1.0500 Minor
1.0675 55 DMA/ (61.8% of 1.0873/1.0340)/Friday high 1.0478 (50% pivot of 1.0340/1. 0624)

Economic data highlights will include:

M: US Holiday – MK Birthday, EU Trade Balance

T: World Economic Forum – Davos, German/EU ZEW Economic Sentiment Survey, New York State Empire Mfg Index, Fed’s Dudley Speech

W: World Economic Forum – Davos, German CPI, EU CPI, US CPI, Industrial Production, Capacity Utilisation, Janet Yellen Speech

T:  World Economic Forum – Davos, EU Current Account, ECB Interest Rate Decision, US Building Permits, Housing Starts, Jobless Claims, Philadelphia Fed Mfg Survey

F: World Economic Forum – Davos, Janet Yellen Speech, Fed’s Harker Speech, Baker Hughes Oil Rig Count

Meta Trader
EURUSD: 4 Hour


USDJPY: 114.52
 US$Jpy was choppy on Friday after the release of the US data, falling to the 114.18 session low and then rallying sharply to 115.45 before falling back at the end of the session, to finish the week at 114.50. The short-term momentum indicators are mixed and not showing a whole lot directionally, so while the coming session could be choppy near current levels the dailies still point lower, so a retest of the 114.00 area is likely. Below the 12 Jan low (113.75) could see a quick move towards 113.00, below which the next major support is not seen until 112.00 although that is unlikely in the near term. On the topside, sellers will again be seen at 114.90/115.00 today, which might be a near term sell area, with a SL placed above 115.50.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
116.00 Minor 114.00 Minor
115.50 12 Jan high 113.75 12 Jan low
115.44 Friday high 113.11 8 Dec low
114.91 23.6% of 118.66/113.75 112.87 5 Dec low
114.50 Minor 112.00 38.2% of 101.18/118.66

Economic data highlights will include:

M: Machine Tool Orders, Tertiary Industry Index

T: Industrial Production, Capacity Utilisation

W:

T:

F:

Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2190
GBPUSD has been the main focus this morning due to a weekend report suggesting UK PM Theresa May will announce that the UK will leave the single market, the customs union and the ECJ on Tuesday. GBPUSD has gapped lower in pre-market trade falling to a low low of 1.1983 at the time of writing.

Cable rose to its Friday session high of 1.2232 following some hawkish BOE comments, although that was as good as it got and it, and ongoing Brexit concerns kept the pressure to the downside, falling to a low of 1.2121 before a recovery into the weekend, finishing at 1.2180. Technically, a cautious stance is again required, and with the momentum indicators not telling us a great deal it could be another choppy session ahead. While the short-term indicators are pointing slightly higher, the daily indicators suggest that Cable is going to remain under pressure in the medium term, and trading from the short side again seems to the plan, There are probably easier things to look at right now. Mark Carney is speaking later today and Theresa may will be making a major statement on Brexit tomorrow.

24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
1.2300 Minor 1.2000 Psychological
1.2250 Minor 1.1983 Early Monday low
1.2200 Minor 1.1950 Minor
1.2150 Minor 1.1900 Minor
1.2100 Minor 1.1821 Post Brexit low

Economic data highlights will include:

M: Bank of England Governor, Mark Carney Speech

T: PM May statement on Brexit, UK CPI, PPI, RPI

W: Unemployment

T:

F: Retail Sales

Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0087
US$Chf traded a tight 1.0042/1.0121 range on Friday, leaving the outlook unchanged. The short-term momentum indicators are mixed but while the dailies continue to point lower, selling into strength seems to be the plan, looking for a test of parity and possibly lower in the next day or two. Above Friday’s high, further resistance is seen at in the 1.0150/1.0200 area. Stops on shorts should be left tight above there.
24 Hour: Neutral Medium Term: Mildly bearish
Resistance Support
1.0275 (76.4% of 1.0335/1.0089) 1.0042 Friday Low
1.0240/47 (61.8% of 1.0335/1.0089)/11 Jan high 1.0035 30 Dec low
1.0210 (50% pivot of 1.0335/1.0089) 1.0000 Psychological
1.0149 12 Jan high 0.9975 Minor
1.0121 Friday high 0.9935 23.6% of 0.9549/1.0343

.

Meta Trader – AxiTrader
USDCHF: 4 Hour


AUDUSD: 0.7502
The Aud fell to the session low of 0.7448 following the release of Friday’s US data, but later recovered to sit at the 0.7500 pivot, where the 100 DMA/200 DMAs are crossing over. The 4 hour charts look to be rolling over so the upside may be somewhat limited today although the dailies still point higher so we could yet see a move towards 0.7540 which should be strong resistance if we see it, and even towards 0.7600. If so, looking to sell into strength may be a plan. Support now lies around 0.7450 and at 0.7430 although I don’t think we head down here today. Look for another session hovering either side of  the 0.7500 pivot.  This week’s highlights will be the local Jobs data and the Chinese GDP.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7567 15 Nov high 0.7470 Minor
0.7540/4 61.8% of 0.7777/0.7160/Daily cloud top 0.7448 Friday Low
0.7524 14 Dec high 0.7429 12 Jan low
0.7517 12 Jan high 0.7390 Minor
0.7508/00 Friday high – 200/100DMAs 0.7351 11 Jan low

Economic data highlights will include:

M: TD Inflation

T: Home Loans, Investment Lending for Homes, New Motor Vehicle Sales (Dec)

W: WBC Consumer Confidence

T: Unemployment, Consumer Inflation Expectation

F: HIA New Home Sales, China Retail Sales, Industrial Production, Urban Investment, GDP, NBS Press Conference

Meta Trader
AUDUSD: 4 Hour


 

NZDUSD: 0.7127
The Kiwi had a brief dip to 0.7070 following the release of Friday’s US data but quickly recovered to finish the week at 0.7120. As with the Aud, while the 4 hour charts appear to be rolling over, the dailies still point higher so we could yet see a test of 0.7150/7200. If that happens, I still prefer to sell into that level, looking for a return towards 0.7000 at some stage although that is some way off. For today, look for some choppy trade at close to current levels, with 0.7100/7150 looking likely to cover it. Global Dairy Trade Index (Tue).
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7275 76.4% of 0.6857/0.7143 0.7100 Minor
0.7238 14 Dec high 0.7075/71 23.6% of 0.6857/0.7143/Friday Low
0.7195 61.8% of 0.6857/0.7143 0.7045 12 Jan low
0.7170 Minor 0.7030 38.2% of 0.6857/0.7143
0.7143/40 12 Jan high /Friday high 0.7000 Psychological

Economic data highlights will include:

M: Food Price Index

T: NZIER Business Confidence, Global Dairy Trade Index

W:

T: Building Permits, Business PMI

F:

Meta Trader
NZDUSD: 4 Hour